Issue No.590
Economy
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13 - 19 June 2002 Issue No.590 Economy |
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| Published in Cairo by AL-AHRAM established in 1875 | Recommend this page | ||
No longer a taboo
Is the national carrier being shaken up in the aftermath of Tunis? A presidential decree has been issued to convert EgyptAir into a holding company, while reform plans aim at internal change. Amira Ibrahim reports
For many years, EgyptAir has been untouchable. This may no longer be the case. A draft law turning the flag carrier into a holding company was approved by the cabinet ten days ago, supported by a presidential decree on the same day.
Ahmed Shafiq
Civil Aviation Minister Ahmed Shafiq has announced that the 70-year-old airline will be split into six companies, reflecting its various activities. The parent company will be known as the EgyptAir Holding Company.
"Each of the six new companies will have a separate board and chairman. All will operate under the supervision of the parent company with guidance from the minister of civil aviation," Shafiq said. He added that new management would be appointed for two or three of these companies.
Shafiq, who took charge of the newly established Civil Aviation Ministry two months ago, has succeeded where his predecessors had failed. The draft law had not been a scheduled item on the cabinet's agenda, but Shafiq moved successfully to get a parliamentary decree in hand before President Mubarak left for the US.
"The measures aim to maximise EgyptAir's revenues by adopting advanced management techniques and exploiting the company's varied activities," Shafiq said.
This will not be achieved in one shot. "The measures will take time. Each division will have to adjust to new realities. In some cases this will mean building the administrative structure from the ground up," Shafiq added.
There would, however, be little impact on EgyptAir's 20,000-plus employees. Shafiq has also promised secure jobs for the 6,000 employees hired on temporary contracts.
Fahim Rayan, the company's head for 18 years, remained absent from the scene. It was even rumoured that he had resigned. Shafiq, however, dismissed this. "As far as I know, Mr Rayan is still working as normal.
"When the law is approved, a ministerial decree will be issued to appoint Rayan as a chairman of the parent company," Shafiq said.
Established in 1932 as the Misr Air Service company and changing its name to EgyptAir in 1971, the company's assets are currently estimated to be LE12.3 billion.
Over the last 20 years, EgyptAir has achieved notable progress. It has expanded and modernised its fleet from 14 planes in 1981 to 35 today. These include 11 Boeing aircraft, 21 Airbus airliners and 3 cargo planes. Additionally, the company has orders for two new Boeing 777-200s, two Airbus A340-600s and five Airbus A318-100s, worth $691.3 million.
Converting EgyptAir into a holding company might even be a step towards privatisation. Since the early 1990s, the government has merged hundreds of public sector companies into holding companies with a view to later privatisation. But the aviation minister rejected the suggestion. "EgyptAir belongs to the government. It is not a candidate for privatisation, nor is it for sale." He added that similar measures were being taken to convert the Cairo Airport Authority into a holding company with a view to developing and improving it.
Shortly after the 7 May crash in Tunis, Shafiq moved to reorganise the national carrier. A unified control centre has since been established to monitor and supervise aviation operations.
"It was apparent that many mistakes were due to a lack of coordination within the company," Shafiq said.
According to Shafiq, the centre is responsible for aviation safety issues. "Everything related to aircraft operations will be controlled through the centre, where pilots will receive flight instructions, information, maps and directions." The minister indicated that the measure aimed to reduce flight delays and to guarantee more accurate information in cases of emergency.
A headquarters for the centre, to be built in the vicinity of Cairo Airport, will be ready within nine months. At present, the centre operates from one of the airport's halls.
The new minister also confronted pilots and directors of the company's foreign offices. He has suspended a pilot and a co-pilot from flying in two separate incidents where they violated aviation safety regulations.
"I will not tolerate any pilot who carries out irresponsible acts. Not when it risks the lives of hundred of passengers," he told reporters.
The message to irresponsible pilots is this: "Think twice or you will be the losers."
In another deft move, Shafiq ordered that the company's foreign offices also be reformed, and that all directors who had been abroad for more than four years be replaced by others.
"Positions will no longer be monopolised. All directors will be appointed for a maximum of two years. Those that achieve targeted goals will stay for a third and, perhaps, a final fourth year," Shafiq stated.
The aviation minister has opened a Pandora's box. But he is unafraid. "I am used to fighting, and confident of victory," he commented. Shafiq is one of the October War's heroes. How will he fight the battles of his new post?
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